NEW YORK (CNNMoney.com) -- Are the nation's retailers giving away the store?

Blockbuster discounts have so far attracted hordes of shoppers this holiday season, which was officially kicked off the day after Thanksgiving. But analysts fear that many retailers - anxious about flagging consumer spending - might have sacrificed too much of their profit by cutting prices.

"We're surprised at how well the traffic numbers looked, especially on Black Friday," said Love Goel, chairman and CEO of Growth Ventures Group, a specialty retail private equity firm.

"When the chickens come home to roost, we'll find out how much of the profit margins were traded off for revenue," Goel said.

One of the first important measures of holiday sales will come next week, when chain stores are expected to report their November numbers. Those figures will include activity on Black Friday and last weekend - a three-day period that accounts for 5 percent or more of total holiday sales.

But industry experts are already dissecting early traffic patterns for clues about trends - and likely winners and losers - in this year's holiday spending.

Electronic buzz: Flat-panel TVs, GPS navigation devices, digital cameras, laptops and videogames are some of the most-sought after holiday purchases.

As a result, Telsey Advisory Group senior analyst Joseph Feldman said stores that sell gadgets will score this year.

In addition, Goel said that Best Buy and Circuit City are boosting their profits by enticing more customers to buy their installation services along with TVs, computers and home entertainment systems - normally low-margin items.

Discount delight: Analysts said that Wal-Mart, Target (Charts, Fortune 500), Costco and other discount stores emerged as early winners because cash-strapped consumers traded down on gift purchases.

In particular, Wal-Mart's decision to make early price cuts on toys and other merchandise was a smart move, said Goel. "It helped Wal-Mart sell holiday inventory weeks before its competitors," he said.

Those initial purchases, combined with Wal-Mart's (Charts, Fortune 500) Black Friday and weekend sales, mean that the giant retailer is on its way to clearing out its store shelves - leaving it with a healthy inventory through the rest of the season.

"If you have excess inventory right now, December will be a tough sales months and profits will suffer more," Goel said.

And it's not over yet. The bulk of holiday shopping - online and in stores - occurs in December.

"Black Friday weekend is just 9 percent of holiday sales - 40 percent of all holiday sales take place between December 15th and 25th," said Feldman of the Telsey Advisory Group. "So there's still a lot of shopping yet to happen."

E-tailers say the second week of December will be their busiest sales week this year

Toy story: Anecdotal evidence shows that parents rushed to toy sellers on Black Friday to grab big discounts, undeterred by the millions of items recalled this year because of lead paint hazards and faulty designs.

Toys "R" Us indicated that the retailer had a very strong start to the holiday shopping period. Wal-Mart, Target and other big box sellers are expected to provide more details about toy sales when next week.

"To think that people would not buy toys at all because of these recalls is ridiculous," said Feldman.

Fashion victim: The lack of must-have fashion items forced stores to resort to deep price cuts on clothes. Goel said discounts of as much as 50-60 percent would result in "reasonably OK" apparel sales but that "retailers gave up a lot of holiday dollars to sell the merchandise."

Feldman believes that women's specialty chains like Ann Taylor, Chico's and Talbots probably did not fare well, while teen chains American Eagle Outfitters and Hollister drew good weekend crowds.

Lazard Capital Markets analyst Todd Slater wrote in a note this week that American Eagle ran the same 15 percent doorbuster sales as it did last year "However, we believe sales were below plan, and maybe even lower than last year."

But Slater did spot some potential winners in the space, such as Aeropostale, Pacific Sunwear and Gap.

"[Gap's] traffic and sales appeared below last year, but that was probably the plan as Gap was less promotional," Slater wrote, adding that the leaner sales should help preserve Gap's profits.

Department of pain: "Department stores are all in trouble," said Goel. "Clothing hasn't done well all year and these stores are all apparel peddlers." Although J.C. Penney (Charts, Fortune 500) and Kohl's likely won sales because they opened at 4 a.m. and offered early-bird deals on Black Friday, analysts said both chains would have struggled to draw big crowds over the weekend.

Goel expects that Macy's (Charts, Fortune 500) was the hardest hit in terms of sales because of its status as a mid-priced retailer. "Americans are either trading up to high-end [stores] like Nordstrom or saving money by shopping at Penney's. Macy's is stuck in the middle," he said.

And Sears Holding (Charts, Fortune 500), parent of Sears and Kmart, on Thursday delivered dour news about its Black Friday performance. The company said its total same-store sales declined 0.4 percent from Nov. 4 through Nov. 27 after a 3.3 percent drop in same-store sales at Kmart offset a mediocre 1.9 percent sales gain at its Sears stores.